Chapter 7: Business Marketing

  Microsoft's Business Marketing to their Xbox 360 is performed in different ways. One of the ways that they use business marketing is by giving their products to gaming companies such as IGN, Game Informer, Machinima and it's partners as well as other game magazine publishers for testing. These systems are then tested for there performance and are rated upon functionality, ease of use, performance, designs, graphical engine etc. After these systems are assessed they are given a rating out of 10 as well as critique on what could be improved as well as it's strong points. These critiques are then used by potential customers to choose which video game console suits them best out of the different Xbox 360 variants.  

Microsoft also participates in Business Marketing through it's sale of Xbox 360 consoles to other companies such as: Best Buy, P.C. Richards, Radio Shack, Toys R' Us as well as other organizations. These companies then sell them forward and make profit.

E-Commerce 

Microsoft has integrated the use of internet to it's product the Xbox 360 as well as to the their methods of operations. The Xbox 360 uses Xbox Live to connect users around the world. This in itself is Business Marketing as players are able to reach other players and spread the word about these consoles to other people, businesses etc. 

Some ways in which Microsoft has expanded their range as well as increased their sales is through the use of the internet. Through the use of websites, blogs, online threads and pod casts people are able to easily find information regarding this technology and what it has to offer. But this does not come without competition. Fellow game companies Nintendo and Sony have also incorporated the use of the internet to increase awareness and sales of their products the Nintendo Wii and Sony's PS3.

Microsoft has created strategic alliances with manufacturing giants: Flextronics, Wistron and Celestica. The alliance with these companies allow mass production of the Xbox 360 parts at a much lower cost. Some of the pieces made in China include the plastic outer shell as well as the wiring that runs within the console itself.

Due to it's long track record Microsoft is regarded as one of the most successful companies in America. The amount of trust that consumers have for Microsoft exceeds that of most companies around the world and therefore creates a loyal consumer base for years to come.  

  

Chapter 8: Segmenting and Targeting Markets

The Xbox 360 is a part of a rapidly growing Gaming Market that is expected to reach 117.9 Billion dollars by the year 2015 and is worth more than 74 Billion as of July 2011. In compliance with our text book MKTG 5 Student Edition the definition of a Market is "people or organizations with needs or wants and the ability and willingness to buy". This is only but one of the many interpretations of Marketing but it boils down to needs or wants and the ability to buy if these two requirements are met along with other factors such as successful market segmentation then a Market can strive.
 Marketing Segmentation- One of the major Marketing Segmentation's in the Gaming Market is made upon different age groups. The markets are divided by age. In reference to a chart that I presented in an earlier post (shown below) the ESRB rating group created a rating system to divide content amongst different age demographics.

 

ESRB rating chart for video games

Based on the content within each game Microsoft is then able to choose which age groups to target. The children will be targeted for the sale of rated ec games while ages 13+ will have rated T games marketed towards them. This way the segmenting and targeting of consumers is made in an effective and appropriate manner.

   

Chapter 11: Developing and Managing Products

Microsoft along with 24 other globally recognized companies (Apple,IBM,Google, etc.)  were mentioned by Business Week and Boston Consulting group as some of the worlds top leading innovative groups. The article expresses some of the perks that these companies have over many others including higher average stock returns and higher average revenue growth compared to other companies that lacked an innovative edge.
Microsoft's New product the Xbox Smart Glass (Compatible with the Xbox 360) is one of Microsoft's newest additions to Microsoft's Plethora of gaming products and innovation.

The Xbox smart glass is still in the introductory stage of the life cycle as it was just released a month ago. Some of the innovative features include:

-Data transfer

-Dual Screen Display

-Data Sync

As well as many other features of the Xbox Smart Glass that can be experienced through the use of Mobile Phones or Tablets running Operating Systems Microsoft OS, Android Jelly Bean 4.2, and Apple IOS 6.

Microsoft Smart Glass serves as a second screen which can be used to see additional information for TV shows and gaming.

Chapter 16: Integrated Marketing Communication

Promotion is key in a products marketing mix. Without it consumers would not be aware of current products/services on the market. Promotional integration in Microsoft's Xbox 360 is important due to the fact that the Xbox 360 is a technological product and needs promotional depth in order to shed light on the systems functions, specs as well as other properties that are not grasped at first by the naked eye.

The Microsoft Xbox 360's competitive advantage over it's competitors the Sony PS3 and the Nintendo Wii are the following:

Xbox 360's competitive advantage over the Sony PS3:

-High Grossing (Xbox Exclusive) Franchises such as: Halo, Gears of War, Fable, Kinect Adventures, and MineCraft which have combined sales that Exceed more than 70 million copies sold as November.

-First to the punch: The Xbox 360 was the first system to integrate Netflix as a part of the overall gaming experience. The fluidity of Netflix is therefore maximized due to the fact that it has been on the system longer and patches were created to fix any errors in comparison to on the Nintendo Wii and The Sony PS3 which experience lag from time to time.
-Xbox Live: The Xbox Live online service is the premier online service for gamers of all kinds. The Xbox Live service has dedicated servers that allow it to run smoothly and with minimal lag so that players can stream data and play games with other players across the globe seamlessly with no problem.
Microsoft uses different types of promotional tools within its promotional mix. Some of these include:
Advertising-The Xbox 360 advertises it's console the Xbox 360 through commercials, blogs, websites and word to mouth communication.  

Sales Promotion-The Xbox 360 is on sale for the holidays. On the official Microsoft website the Xbox is available in Holiday Bundles that start at $249.00 that is $50.00 off of the retail price. The holiday bundles come in 3 forms.
-Xbox 360 Slim 250GB console $249.00 with 2 games (Kinect not Included)
-Xbox 360 Slim 4 GB console $249.00 with 2 games (Kinect Included)
-Xbox 360 Slim 250 GB console $349.00 with 2 games (Kinect Included)

The methods in which Microsoft reaches potential and existing customers is through the process of communication.
Communication-The process by which meanings are exchanged or shared through a common set of symbols.
Mass Communication-The way that Microsoft is able to reach many of it's new and existing customers is through the web. There are more than 1 billion internet users across the world and with this huge pool of people to work with the world wide web serves as a very important tool in reaching potential customers.

Chapter 10: Product Concepts

Microsoft's Xbox 360 gaming system falls under consumers product. It is purchased to satisfy the individuals personal want's.
The Xbox 360 slim (shown below) is a product item by Microsoft within their video game product line. The Xbox 360 comes in two forms the original released in 2005 which comes in two color variants white and black with two storage capacitive options (20GB,120GB). The Xbox 360 underwent product modification to improve performance and to make it a more viable option over the Sony PS3 and the Nintendo Wii. Some of the modifications in the new Xbox 360 slim had were the following.
-Integrated Wireless WiFi integration allowing players to seamlessly connect to the internet at faster speeds.
-Touch activated On/Off button and Disc Tray sensor for gamer convenience.
-Kinect Capability for full use of the Kinect motion gaming experience.
-Modified slim design with more cooling vents to keep optimal performance and stability of the system constant. 
All of this as well as the fact that the memory variants are available in two versions as well (4GB,250GB). The 250GB version is 130GB greater than the previous systems highest capacity of 120GB. Within the width of Microsoft's product mix are computer software, online services as well as video games.
The release of the new Xbox 360 slim was in an attempt of planned obsolescence make it's predecessor the Xbox 360 (Elite) obsolete in the eyes of gamers.

The Xbox 360 (Elite) 2005 (Before)

The Xbox 360 Slim (2010-Present) (After)

The Xbox 360 is it's own brand under Microsoft. It is represented by a circle to represent 360 degrees and the X within the circle represents a new edgy take on gaming. The green surging the circle represents human energy.

The Xbox 360 Logo

 

Chapter 18: Sales Promotion and Personal Selling

Microsoft's Xbox 360 serves millions of gamers and tech enthusiasts around the world. But the Xbox 360 would not be as successful as it was without the loyalty of it's existing customers that upgraded from the last generation console The Xbox (2001-2004) as well as newcomers that just wanted a top quality gaming and entertainment system all in one.

Microsoft accommodates both it's existing customers as well as it's new customers with some perks that are hard to find on any other gaming platform.
Xbox silver (Xbox online service membership-Free)
With Xbox Live Silver members are able to:
-Communicate with other members online as well as video chat.
-Share media and online content to other Xbox Live members.
Xbox Gold (Xbox online service membership-$50.00 a year)
With Xbox Live Gold members are able to use all of the perks of Xbox Live silver members as well as:
-The ability to play multiplayer online with other Xbox Live members across the world.
-Entries into online raffles and contest for prizes ranging from games to vacations.
-Special online content such as Microsoft points which can be used to purchase games avatar items and customization items.
Special Sales:
Microsoft has on the Xbox 360 is the 50% off deal: When customers purchase Xbox Live Gold Service ($15/Month) for two years 50% is taken off the purchase of your Xbox 360.

Also available for the upcoming festivities are the Holiday Bundles. The Holiday Bundles available are great gifts for those who want to experience a premier gaming experience and Microsoft makes it more affordable for those who want to get their hands on exclusive titles such as: Gears of War and Halo by reducing the price of the Holiday Bundles by $50 dollars.   

With all of these sales Microsoft has made it easy to bring home the next generation of gaming and entertainment that is the Xbox 360.

Chapter 17:Advertising and Public Relations

Advertising: A form of communication for marketing and used to encourage and or persuade an audience to continue or take a new action.

Microsoft's Xbox 360's Advertising appeal: Fun and Pleasure- Microsoft has taken a fun and pleasure styled advertisement appeal under their wing. This is primarily due to the fact that the Xbox 360 is a entertainment console and this advertising approach is more involving. It relates to the gamers while advertising to new incoming potential gamers as well.

Microsoft Advertising on the Xbox 360's Xbox live Dashboard.

                        

            Advertisement for Microsoft's new feature Xbox Smart Glass

Microsoft's Xbox 360 Execution style for Advertising: Lifestyle, Fantasy, as well as Mood or Image.

Microsoft's Mediums:  Microsoft spans its Advertisements mainly through the web as well as broadcast TV. In a growing digital age Microsoft is able to advertise through these two mediums as well as on Microsoft's Xbox 360 online service Xbox live. Through Xbox live players are met with a number or advertisements pertaining to Microsoft and its offerings as well as other companies and franchises such as MC Donald's, Coca Cola, etc.

Trending Advertisements: Microsoft is advertising their product the Xbox 360 as well as it's consoles service Xbox live.
Microsoft's Pioneering Advertising: Microsoft will release its new app Xbox smart glass on October 26th. In turn Microsoft has started an advertising campaign touting the features and benefits that this new application reaps as well as the platforms that it will be available on. According to the official Microsoft website this app will be available on Windows 8 devices, apple iOS 6 and android 4+ operating systems.

Public Relations: Microsoft's public relations are condensed in the areas of press relations, product publicity and public affairs.
Press Relation: Microsoft's Xbox 360's new feature Xbox Smart Glass has released various information to the media regarding it's features and the ways in which it can simplify multitasking and maneuvering across various forms of entertainment. These include music, gaming, surfing the web, and media sharing. As explained in the video above. This as well as the key note speech for the Xbox smart glass has given the gaming and entertainment world something to look forward to, simplicity of technology through Xbox smart glass.

Chapter 15: Retailing

The Microsoft 360 availability nation wide is pretty common but only some stores are able to provide the full Xbox 360 hands on experience of allowing consumers to play and test out the system themselves. One of these places was Game Stop. Game Stop prides itself on the sale of vast amount of games made available to consumers of all ages as well as the sale of accessories, consoles, tablets, and software at the best prices available. I visited a local Game Stop and the First thing that I noticed were the games on the outer display. Which are usually the most recent releases of games that are currently out or are upcoming releases. These displays are a part of Game Stops marketing strategy to lure ongoing consumers to come in and find out more on these latest games as well as the consoles that pertain to these games.

Game Stop- is an chain specialty store that specializes in the sale of video game software, consoles, accessories and electronics.Game Stop uses in store and non store retailing methods.

In Store Retailing- For those who want a more hands on approach and like to see things for themselves and interact with the product of their choice.

Non store Retailing- Game Stop has their own website www.gamestop.com in which they sell all of their products as well as online exclusives*. This is their 

E-Commerce. They also have Mobile Commerce or M-Commerce where consumers are able to shop for their desired goods through the convenience of their phones. 

In Store Experience- The local Game Stop that I visited had a vast and well constructed visual display of products as well as hands on interactive displays of my product the Xbox 360. There I was able to play video game demos as well as watch trailers of upcoming games and movies. This was a great touch to the overall store experience and helps newcomers as well as existing players feel comfortable and welcomed to the gaming world that is the Xbox 360.

Note Online Exclusive*- The online exclusives include offers that are limited to those who shop online. These selected products are only available online and not in stores. Some items include bonuses for those who do not want to visit the stores themselves. 

 

Chapter 6: Consumer Decision Making

Which one should I pick?

Whether or not a product will be purchased is left up to the consumer ultimately. But it is important for companies to study and assess the behavior of consumer wants and needs to further satisfy them with a specific product/service. The Microsoft Xbox 360 uses various techniques to draw in consumers and increase the demand of their product. Some of the techniques used by Microsoft to ease the difficulty of choosing a gaming system amongst the flurry are the following:
The Slogan-The slogan for the Xbox 360 is "jump in". With this slogan comes with it social connotations. When people are wondering if they should purchase an Xbox 360 or not they wonder if their friends have the systems and whether or not they have a certain game that they are interested in. The slogan "Jump In" builds an inner social circle amongst the Xbox 360 online gaming community and this therefore attracts many other gamers to "Jump In" and be apart of this inner circle. This in turn eases consumer decision making and makes the gaming system a necessity in a constantly changing gaming market.

The Original Xbox 360 (2005)

The New Xbox 360 Slim (2010)

The Appearance-The sleek appearance of the Xbox 360 is appealing to hardcore gamers. With the release of the revamped (2010) Xbox 360 an even more sleek and resilient look and feel adds to the Xbox 360's need recognition.

Abraham Maslow's
Hierarchy of Needs

According to Abraham Maslow and the Hierarchy of needs our needs are recognized by the most important and works it's way up to the least important. The Xbox 360 being that it is a material good and is not needed for grave reasons is within the second and third tier (Esteem Needs, Social Needs). In reference to the slogan and the appearance; these two factors make it seem as though the Xbox 360 is more of a need than a want. In an ever changing technologically centered world people find themselves playing catch up with the latest and greatest tech gadgets in order to stay within social circles and norms.

Chapter 5: Developing a Global Vision

Microsoft is known as a very diverse company in terms of outsourcing jobs and global marketing activity.

"At Microsoft we recognize that the U.S. and global diverse markets represent tremendous sources of value in the workplace and marketplace. The growth of diverse populations worldwide and the potential of these segments make them important targets as prospective employees. By the year 2050, 85% of the entrants into the U.S. workforce will be people of color and women. Moreover, developing regions, such as China, Brazil, India, and Africa, make up an increasing share of the world population. They will account for approximately 88% of the global population by 2050, and increase in absolute size from 1.6 billion persons in 1950 to nearly 7.5 billion persons by 2050 Economically, the diverse markets represent a growing source of market consumption and buying power. They are an important customer group for Microsoft. Worldwide, diverse populations account for 44% of World GDP. Within the U.S., diverse populations generate over $9 Trillion dollars in buying power. By increasing the diversity of our workforce we will create a team that effortlessly designs products with the needs of these growing customers in mind".

Source: http://www.microsoft.com/about/diversity/en/us/vision.aspx

But not only does Microsoft outsource jobs to other countries around the world, they also participate in the process of importing and exporting. The Microsoft product the Xbox 360 is created in China due to a venture with Chinese leading manufacturers: Flextronics, Wistron and Celestica.

Materials such as plastic for the outer shell and metals for the internal parts are exported to China where the system is then created and put together then imported to the US.

The Xbox 360 is sold in many countries around the world including 

The United States, Canada, the EMEA region, Japan, United Kingdom, Australia, New Zealand as well as many others. In total the Xbox has sold over 67.2 million units worldwide (As of April 19,2012) and they do not plan to end anytime soon.
Another way that Microsoft's Xbox 360 is involved in global marketing is through their online service Xbox Live. Xbox Live is an online service available on the Xbox 360 that connects players with other players (With Xbox Live) around the world. Players are then able to play with or against other players from around the world as well as exchange messages, videos, information and more. This opens a big social aspect to the Xbox 360 by increasing connections and awareness of the Xbox 360 product and it's services to others around the world.

Chapter 4: The Marketing Environment

Microsoft's product Xbox 360 gaming systems primary target market consisted of two groups:
Teens: Ages 13-16
Generation Y: People born between the years 1979-1994
These two groups made up more than half of the sales volume of the microsoft Xbox 360's system sales as well as the video game software sales.
In order for Microsoft to appeal to a wider audience two new methods were introduced
-A wider variety of games across all platforms for younger players under 13 as well as more variety for the two already dedicated groups (Teens and Generation Y)

Rated E+10 for ages 10 and up

Games Rated (E-M Ages 6 and up)

-Another way that Microsoft has done this is through the Xbox 360 Kinect: The Xbox 360 Kinect is a motion sensor that was introduced by Microsoft in 2010. The sensor allows players to game on a more interactive level and has helped the Xbox 360 boost it's sales by making the system a more appropriate gaming experience across all age demographics by introducing more family oriented gaming designed to immerse players of all ages. Through this Microsoft was able to broaden it's range to a larger target audience.

Chapter 3: Ethics and Social Responsibility

Microsoft Corp. code of ethics were created "to help you make good, informed business decisions and act on them with integrity."

Microsoft's code of ethics is broken down into six values to guide employee conduct: integrity and honesty, passion for customers, partners and technology; being "open and respectful with others and dedicated to making them better"; also a "willingness to take on big challenges and see them through"; as well as being "self-critical, questioning and committed to personal excellence and self-improvement"; and last but not least being "accountable for commitments, results, and quality to customers, shareholders, partners and employees."

Microsoft has also set up a business conduct line in order to enable employees to report any breach of ethics within the company to help prevent any wrongdoing.

Microsoft Corp. was named #2 out of the top 3 most admired companies by US consumers. For it's consistency in higher ethical and moral standards among many other companies around the world.

Through the thorough process of strong ethical grounding Microsoft has helped improve itself not only from the outside, but also within.

Microsoft Corp. with the help of techsoup.org have set up a charity to non for profit organizations and libraries alike and are helping them by supplying free software to help them reach their goals. This is one of the many philanthropic things done by Microsoft to help those in need.

Chapter 2: Strategic planning for competitive advantage

Microsoft's strategic plan for the Xbox 360 is to maximize the players online experience through unique and innovative methods. The Xbox 360 has held dominance in the gaming market. This is due to some of the many unique and one of a kind implementations that the Xbox 360 was able to introduce with it's release in the summer of 2005. Some of the competitive advantages that the Xbox 360 has had over it's competitors (The Sony PlayStation 3 and the Nintendo Wii) are the following:
-The Xbox Live service: The best online service and experience across all consoles. Xbox Live offers the fastest and most reliable connections on all consoles. This surely gives an edge over the competitors. Xbox Live offers live chat, messaging, along with an impressive dashboard layout and minimal lag to maximize players online experience.
-Netflix on the Xbox 360: The Xbox 360 was the first gaming system to have Netflix as a part of their online experience. With the addition of Netflix an extra layer was added to the entertainment of the already packed Xbox live experience. This set the Xbox 360 ahead of it's competitors in the race to the top.
-Xbox 360 exclusives: The Xbox 360 held the exclusive rights to two of the highest grossing game series of all time. Halo and Gears of War are two of many Xbox 360 exclusives that have helped put the Xbox 360 over the top and has helped to bring in massive amounts of revenue by setting the bar high in terms of maximizing entertainment and value for a quality experience.
All of these factors have helped put the 360 on top of the competition in terms of quality game play and online experience.    

Xbox Live

Gears of War and Halo 3

Netflix on the Xbox 360

  

Microsoft Corp. Mission Statement

Microsoft's mission statement is "to help people and businesses across the world realize their full potential". Microsoft has helped serve many countries worldwide with exceptional products and service. Microsoft has helped many people with heavy workloads and everyday problems in the workplace. "How did they do this?" you might ask. Well it's all in the advancements made daily for the convenience and the satisfaction of the consumers. Microsoft works to make life easier through technology and aims to do just that by helping the everyday person and business realize their full and true potential.
Microsoft's mission statement for one of it's products the Xbox 360 gaming system is "to provide fun online gaming and interactive game-play for any age group". The Xbox 360 was created to immerse families friends and people across all age demographics into the world of online gaming. Since this project took off more and more people found themselves involved in the gaming universe and have not turned their backs on the experience. Everyday Microsoft aims for a better and brighter future.

The Xbox 360 gaming console

Brief History of Microsoft Corp.

Microsoft started as a small software company located in Albuquerque New Mexico. Microsoft was founded in 1975 by Bill Gates and his partner Paul Allen and started off as a small software company that created operating programs for PC's. This in turn grew and grew to become one of the biggest and most valuable companies in the world. As Microsoft expanded they felt the potential to grow and drifted away from solely selling computer software. Farther down along the road Microsoft dove into other business ventures including the sale of: Music devices, gaming devices as well as video game software. Some of the more popular products sold by Microsoft include: Windows 7 Professional, Microsoft Office Professional (2010), Windows Server Standard (2008) and many more. Microsoft has also held a dominant place in the gaming market with the release of the Xbox 360° (2005) and has brought in a completely rejuvenating market to Microsoft's repertoire of high grossing products.